(Bloomberg) -- Southwest Airlines Co. said third-quarter sales will take a $100 million blow from this year’s devastating hurricanes and earthquakes.
About 5,000 flights had been canceled through Wednesday because of the natural disasters, the carrier said in a statement Thursday. Southwest also pared its outlook for revenue from each seat flown a mile, saying the benchmark gauge would be little changed in the third quarter even in a best-case scenario. Previously, it said the figure would potentially increase “slightly.”
Related: Business continuity plans & technology help businesses weather Hurricane Harvey
|Natural disaster compounding other problems
The natural disasters are compounding other problems that have weakened the financial outlook at U.S. airlines recently, including fare battles, higher fuel costs and feeble demand for pricey, last-minute tickets. Delta Air Lines Inc., United Continental Holdings Inc. and American Airlines Group Inc. all lowered their revenue estimates earlier this month.
Southwest said costs for each available seat flown a mile will increase 3% to 4% in the current quarter from a year earlier. Previously, the Dallas-based carrier had projected that costs would rise no more than 3%.
The shares rose less than 1% at 9:54 a.m. in New York. Southwest advanced 12% through Wednesday, the biggest gain on a Standard & Poor’s index of the five biggest U.S. airlines.
|Puerto Rico flights still limited
Flights to Puerto Rico are still limited after the island was battered by Hurricane Maria. Earlier this month, Hurricane Irma pounded Florida and the Caribbean, while two earthquakes in Mexico took more than 400 lives.
United suspended operations at its Houston hub for four days earlier in the quarter and scrubbed more than 7,400 flights because of Hurricane Harvey, the company disclosed earlier this month.
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